President's Report for the Year 1958-1959

W. LENNIG TRAVIS
President

At this point in our program, by custom, your President has the duty and privilege of presenting to you the highlights of the Association's activities during the year. Before doing so, however, I take cognizance of the fact that this week has been designated National Transportation Week. Throughout the country the observance of this week, a practice initiated by the Associated Traffic Clubs several years ago, in honor and recognition of the world's best transportation system, continues. I believe it is fitting and proper for our Association whose members are engaged in assisting the Interstate Commerce Commission, the principal federal transportation regulatory agency, in its administration of the laws regulating most of the principal components of that system, to join in its observance. Promotion of transportation not being among the objectives of this Association, I also believe that our observance should be confined to these remarks and those that may be made by the gentlemen who will talk to us today and tomorrow.

Now, as to the highlights of the year's activities. I can report to you that financially and numerically the health of our Association continues to be sound. Although our Treasurer David Macdonald will report later in more detail on our financial position, suffice it to say now that we operated in the black again during the fiscal year ending September 30, 1958, and continue to do so during the current year. Accordingly, no increase in annual dues will be required. Our costs of operations, nevertheless, continue to increase, and only by the efficient management of our staff are we able to remain on the plus side of the ledger.

Our membership continues to grow, nearly 4100 practitioners now being enrolled. Arthur A. Arsham and the members of his committee on membership have been active this year throughout the country talking and writing to practitioners, urging their support of our Association. Their efforts have been successful.

While on the subject of membership I must call to your attention the excellent work of our Regional Committees on Admission to Practice. These men carry out the investigation task assigned to the Association by the Interstate Commerce Commission of inquiring into the character, morals and community standing of all applicants for admission to practice. The members of these committees receive no rewards or recognition for their work, but all of them continue to function upon request quietly and efficiently. I extend to all of these practitioners the gratitude of the Association.

No other subject has had more attention from this Association in the past four years than that of the many changes, some of them drastic,

* Presented at the Thirtieth Annual Meeting, Association of Interstate Commerce Commission Practitioners, Hotel Dinkler Plaza, Atlanta, Georgia, May 14, 1959.

proposed by the American Bar Association and others in administrative law, practice and procedure of the federal regulatory agencies. Beginning with the report of the Committee of One Hundred to the special meeting of this Association in Washington in November, 1955, this vital subject has received almost constant consideration. Three years ago, Erle Zoll appointed Starr Thomas as chairman of a special committee on administrative law to study and report on the various proposals and to be prepared to present the Association's views to Congress. Last year Ford Edwards assembled a subcommittee of this special committee to present our views at the appropriate time on proposals to limit or prohibit nonlawyer practice before federal administrative agencies, particularly the Interstate Commerce Commission.

None of the numerous bills introduced in the 85th Congress on this subject had hearings. Consequently all proposed legislation died with adjournment of that Congress. However, both the Executive Committee and Starr Thomas' Committee felt that these proposals and probably others would be reintroduced in the present Congress. I do not have to tell you that our feeling has been confirmed.

In the belief that enough discussion had been had on these proposals and that the time for action had arrived, the Executive Committee combined the committee on legislation and the special committee on administrative law with Starr Thomas as chairman and reactivated Ford Edwards' subcommittee on nonlawyer practice. During the last four and one-half months these men, and more recently Harry Brashear, acting chairman in Starr Thomas' absence, have been prepared to appear before the several Congressional Committees. Requests for time to present our views have been granted.

The Association strongly recommended confirmation of Commissioner Charles A. Webb's appointment to the full term expiring December 31, 1965. As you know Mr. Webb received Senatorial approval without difficulty and is now officially the Commission's junior member.

Another important matter that continues to concern us is maintenance of a budget for the Commission adequate to permit reasonably complete and efficient performance of its assigned administration functions. The original budget of $17,000,000 for fiscal 1959 was accepted without difficulty as was the $300,000 supplemental appropriation last fall. Now proposals have been advanced to reduce this amount by 50 percent in the Senate and remove $750,000 from the Commission's 1960 budget of $20,900,000. Mandatory wage increases retroactive to January, 1958 and the Transportation Act of 1958, which increased the work load of the Commission substantially, have caused this increased need for funds. Strong presentations to the Congressional appropriation committees have been made urging adoption of the complete budget request.

The Committee on Procedure, of which Richard Spatz is chairman, and the Executive Committee continue to give serious attention to the quality and cost of transcripts of Commission hearings. Late last fall when it became evident that the reporting company with which the Commission had contracted for transcripts would default, we were asked to obtain expressions from members as to their experience on quality

and service during the last six months of 1958. Mr. Spatz conducted a survey among a selected list of practitioners and the results, which indicated mixed reactions on quality and service were discussed with key members on the Commission's staff. The Executive Committee then made certain recommendations to the Commission concerning the reporting service contract. Some of these have been included in the Commission's invitation to bid on this service for fiscal 1960.

The Journal continues to be recognized as an outstanding legal periodical. Walker Myskowski, Editor-in-Chief from the fall of 1956 until pressure of business required him to relinquish this work last fall, did an outstanding job in maintaining its excellence, for which we are very grateful.

Fritz R. Kahn graciously accepted our invitation to assume editorship of the Journal. With his characteristic vigor, Mr. Kahn immediately suggested some changes in format which the Executive Committee liked and approved. In the April issue, Mrs. Roberts' suggestion of adding a table of cases to the Index to Current I. C. C. Decisions was tried. On behalf of the Association I thank Mr. Kahn, Mrs. Urmey, Mrs. Roberts and the section editors for their diligent and productive efforts to make the Journal a more useful tool to all practitioners.

The Committee on Education for Practice chairmanned by Robert Einhorn has just completed a badly needed revision of our Outline of Study Course in Practice and Procedure. Publication of this up-to-date aid to students will be made in the near future. Work on the revision of our Manual of Practice and Procedure continues.

You all know that our Association could not function without a willing and competent staff at our Washington Headquarters. Under the direction of Mrs. Mary Louise Urmey, our new Executive Secretary who has proven to be a worthy successor to our beloved Sarah McDonough, the staff of Mrs. Roberts, Mrs. Wilkes, Mrs. Cassidy and Mrs. Whitcraft really makes our Association work. I thank all of them now for their splendid contribution during the past year towards making our Association useful to our members and the Commission.

BY THE HONORABLE RUPERT L. MURPHY

Member, Interstate Commerce Commission

It would seem appropriate here for me to open my remarks with a quotation from Rudyard Kipling made quite sometime ago but which has even greater significance today than when it was made, which says:

When a nation is lost the underlying cause of the collapse is always that she cannot handle her transportation. Everything in life *** turns on the speed and cost at which men, things and thoughts can be shifted from one place to another. If you can tie up a nation's transport you can take her off your books.

In a broad, closely-knit, and highly-developed country such as ours, the importance of speedy, dependable, adequate transportation cannot be overemphasized, not only for the convenience and commerce of the people, but also for the national defense. The transportation system which we have in this country is based upon the concept of private initiative or enterprise, and the Congressional policy, and that of the Interstate Commerce Commission in carrying out that policy, is to interfere with that concept no more than is necessary to provide fair play between those served and between the various competitive modes of transportation, while fostering, so far as practicable, a national transportation system adequate to meet the needs of the commerce of the United States, of the postal service, and of the national defense.

Transportation Conditions in 1887

When the Commission was brought into being in 1887, there were already in existence in this country about 156,000 miles of railroad, and there was considerable transportation by water and still more by horsedrawn vehicle. At that time violent rate wars, especially between competing railroads, were common; there was no requirement for the publication of tariffs open to public inspection, and rates were made largely based on what the traffic would bear, or, as someone has more aptly phrased it, on the primary consideration of what the traffic would not bear; and no shipper could tell from one day to the next what his transportation charges would be or what his competitor was paying for like service. As one railroad traffic officer of those times explained it: "We followed the rule of 'the 3 C's'-comparison, competition, and compromise." Since the smaller communities and industries, and the farmers, often enjoyed no carrier competition, the benefits of competition, the major influence in making rates then, were unevenly distributed, and went principally to the larger communities and large shippers who were able to play one competing carrier against another. That was the day

* An address before the Thirtieth Annual Meeting of the Association of Interstate Commerce Commission Practitioners, at the Hotel Dinkler Plaza, Atlanta, Georgia, May 14, 1959. See also the panel discussion on the "Revised Rule of Ratemaking," reported in this issue.

of secret rebates, which became a national scandal. It was then that the Interstate Commerce Commission was born, and its chief purpose was to protect the smaller shippers and communities against exorbitant rates. to compel adherence to published rates, and to get rid of unjust discriminations.

Litigation and adverse court decisions so weakened the original Act that further legislation was necessary, and it was not until the Hepburn Act in 1906 that the Commission was given the necessary power to require the removal of unjust discrimination and undue prejudice, and to prescribe maximum reasonable rates. This was recognized by the Supreme Court a few years later in a famous case, Interstate Commerce Commission v. Chicago, R. I. & P. Ry. Co., 218 U. S. 88, in this language:

From whatever standpoint the powers of the Interstate Commerce Commission may be viewed, they touch many interests, they may have great consequences. They are expected to be exercised in the coldest neutrality ***.

The outlook of the Commission and its powers must be greater than the interest of the railroads or that which may affect those interests. It must be as comprehensive as the interest of the whole country. If the problems which are presented to it are complex and difficult, the means of solving them are as great and adequate as can be provided.

Thereafter, following complaints by shippers, chambers of commerce, other business organizations, localities, ports, and regions, the Commission required the removal of unjust discrimination and undue prejudice and preference, and a reduction in rates which exceeded maximum reasonable levels, in numerous adjustments affecting all sections of the country, so that today I think I am safe in saying there is less injurious discrimination or prejudice between shippers, communities, or regions than ever before in the history of volume transportation in this country.

Now, let me go back some more. Time and increased experience in carrier regulation gradually indicated that the original concept as to the proper scope of the regulatory power had become too narrow. Protection of shippers and localities was originally considered to be the predominant feature of the Act. The first World War developed other aspects which pointed up the importance of the relation between the carriers and the State. As comprehensively amended by the Transportation Act of 1920, Congress made it the affirmative purpose of the Act to build up a system of railways appropriate to handle efficiently and economically all of the traffic of the country, and to develop and maintain an adequate railway system for the people generally. As appears on one of the mural paintings in the Department of Justice Building in Washington: "The life of the law has not been logic; it has been experience."

History of the Ratemaking Rule

In the Transportation Act of 1920, the Congress for the first time set up a "rule of ratemaking," which was intended to make a funda